Calculating the benefits of lower market weights

With corn prices nearing the $8 level, hog market weights are receiving more scrutiny than ever before. As feed efficiency drops in the late finishing phase pork producers look for some relief from this costly gain at the end of the production cycle.

“Currently, the optimal market weight has dropped much more significantly than some producers realize,” says Mike Tokach, Kansas State University Extension swine specialist. “With current market prices and higher feed costs, the optimal market weight is now 245 to 260 pounds for many producers,” Tokach says.

As feed prices continue rising, some producers have used a step-by-step approach when reducing their market weights. “We were marketing at 284 pounds this summer, then moved down to 274 pounds, then 262 pounds, and we are now contemplating 245 pounds,” says Al Wulfekuhle, Quasqueton, Iowa, a partner in two farrow-to-finish operations marketing around 100,000 hogs per year.

While packer-imposed discounts may apply to some pigs in this weight range it may still be advantageous for producers to bear the penalty. Determining optimum market weights requires a clear understanding of your cost of production as well as your packer's grid at various weights.

To help producers evaluate their optimal market weights, Kansas State University has developed online calculators that producers can download to their office computers. The tools, available at KSUswine.org, include a feed efficiency calculator that calculates what happens to margin over feed costs as hogs reach finish weights.

Also available from Kansas State is a market weight predictor which incorporates the marketing grids of most packers. Producers select the appropriate processor, enter their feed costs and the latest market price. They can then see their current optimal market weight for hogs.

With lower market weights, the pork supply will be reduced and eventually lead to firming hog prices, according to Tokach. “Our hope is that as market weights are reduced, we can stabilize and increase market prices in November and December.”